Microsoft extends lifeline for older PCs

Microsoft on Wednesday revealed software that turns older PCs into more modern and secure systems, but in the process also makes them less than full-fledged computers.

The software, known as Windows Fundamentals for Legacy PCs, is designed as a stopgap measure for companies with a significant number of older Windows PCs that they aren't ready to replace and that can't be easily upgraded to Windows XP.

Formerly known by its Eiger code name, Windows Fundamentals gives those PCs some of the security benefits of XP but essentially turns the machines into thin clients, able to run only a few programs locally, with most software needing to run remotely from a server.

"Software Assurance is certainly more than upgrades," said Mike Oldham, a general manager in Microsoft's licensing group. "We see it as a full offering that we are incoprorating more value into all the time."

Oldham said that Microsoft developed Windows Fundamentals because corporate customers were looking for a way to get more years out of their PCs. "This gave them a key tool for expanding those life spans."

Turning PCs into thin clients is something new, Oldham said. "Typically we have not delved into that area."

The company also announced that it is making Virtual PC 2004 Service Pack 1 available free to customers. Volume-licensing customers who adopt Windows Vista will be able to install up to four copies of the operating system in each machine, provided that they are all for use by a single user.

Microsoft has been working hard to sway customers away from the notion that Software Assurance is primarily a way to buy its products on a subscription basis. Under the program, customers pay an additional fee when they license a program and get the rights to any updates issued during a specific period, usually three years. In some cases, though, Microsoft has taken more than three years to prepare an update--the recent release of SQL Server took five years; and Windows Vista is expected to debut early next year, more than five years after Windows XP.

Also on the virtualization front, Microsoft said that effective Oct. 1, companies using Windows Server 2003 R2 Datacenter Edition will be able to run any number of virtualized Windows Server instances. By licensing the Datacenter version, customers will be able to run an unlimited number of virtual versions of the standard, enterprise or Datacenter editions of the operating system.

Meanwhile, VMware, whose virtualization software competes with Virtual PC, said on Wednesday that it is ready with the free version of its GSX Server, for which it once charged up to $2,800. VMware, which is a subsidiary of storage giant EMC, said in February that it would make the software available for free.

Microsoft also announced on Wednesday a new "buy now, pay later" financing promotion, under which business customers can get Windows Vista, Office 2007 and other products by paying $50 a month for six months and then spreading the rest of the cost over 36 equal payments.